Legal Processes Required To Protect A Business Setup In India

Business Setup In India

Many startups have come into being in India over the last two decades. Some of them have had great successes while some others have fallen by the wayside. Startups come with great ideas and innovations which they leverage to reap good benefits. However, along with great ideas and sharp business acumen, these entrepreneurs need to have a strong legal structure to pre-empt any threat to their business in the future.

While establishing their business set up in India, many are unaware of the legal requirements that would protect their business interests. They continue their business without obtaining certain necessary legal documents that would shield their business from unwanted threats. However, concerted efforts by the government have created awareness in them about the need to have legal ammunition to safeguard their ideas and innovations from being stolen or copied unlawfully. Some of the very crucial legal processes that should be completed while setting up a business in India are discussed here under.

Intellectual Property Right

The class of intangible asset that is created by the human mind is categorized as Intellectual Property. The creators and owners of intellectual property need to protect their assets from infringements and misuse. Intellectual property laws are there to protect these assets. It grants exclusive ownership rights to the creators of these assets. It is called Intellectual Property rights. No one else can use it without prior permission of the owner. Securing intellectual property rights is especially crucial for technology startups as it represents the actual value of the business. It is the uniqueness of the intellectual property that the entrepreneur expects to get funding for. If the intellectual property is not legally secured then it becomes vulnerable to infringements and misuse. The uniqueness of the idea or an invention will be lost adversely affecting the interests of the creators of such assets. Intellectual property right applies to new inventions, designs, creations, etc., and is universally valid.


A type of intellectual property, Trademark consists of easily recognizable sign, logo, design or expression that differentiates and identifies product and services from a particular stable. Trademark can be owned by individuals or business entities and can be printed on labels, packages or the product itself. To project corporate identity, trademarks are often prominently displayed on buildings of companies. Trademark is of great significance as it is an effective tool to communicate with the consumers.

Companies earn reputation and goodwill over a period of time and trademark is synonymous with that. If someone else illegally uses a highly recognizable trademark for its own gain, with malicious intent to fool the general public then it is clear violation of the trademark law. The owner of the trademark is at risk of losing out on business and goodwill. It is, therefore, very important that business set up in India register their trademark to avoid any misuse.


Internal laws to run the business are called bylaws. Bylaws help to establish strong rules and regulations within the organisation to ensure smooth business operations. To avoid internal disputes and complications in business operations, bylaws are a must. It fosters a clean work environment and is very effective in resolving any dispute whatsoever within the company. It desists any wrongdoing by an employee or a business associate that may go against the interest of the company.

Patent Registration

A patent is a legal requirement to prevent other persons from making, using or selling an invention. A patent is granted for a set period of time during which the creator or owner has the sole right over its use. After the patent period is over the invention becomes public property.

A lot of time, effort and money are needed to make an invention and patents ensure that the real benefits of the invention goes to the creator. It is, therefore, very important to obtain a patent.

Promoters and Shareholders Agreement

These agreements are necessary to ensure long term commitment from both parties. These agreements keep the founders and initial investors bound together and engaged in the business without any conflict. They define the roles of the founders and the investors in a business set up in India. It is a legal document and the stakeholders are bound to abide by it.

To conclude, the above mentioned legal processes are absolutely vital for a business set up in India to operate unhindered by a potential invasion of their legal rights. These processes are a bit complex, but there many specialist legal firms who work in these areas and help companies obtain the necessary legal documents. These legal firms also help in setting up LLC in India.